On October 19, 2022, the Second Department issued a decision in Transcan Sys., Inc. v. Seldat Distrib., Inc., 2022 NY Slip Op. 05881, holding that a plaintiff can assert both contract and fraud claims when the fraud claim is based on misrepresentations that are collateral to the contract, explaining:
The Supreme Court also erred in granting that branch of the defendants’ motion which was pursuant to 3211(a)(7) to dismiss the cause of action sounding in fraud insofar as asserted against Seldat Distribution and Dadoun. Contrary to the court’s determination, the cause of action alleging fraud was not duplicative of the breach of contract causes of action, as it alleged that the defendants made misrepresentations of present fact that were collateral to the subscription agreement and served as an inducement to enter into the agreement.
(Internal citations omitted).